India’s basmati rice crop area may rise by 20% on higher prices, demand from Iran

Farmers are expected to grow more Basmati rice this kharif season, with the acreage under cultivation likely to go up by up to 20 per cent, driven by higher remuneration, low carryover stock and increased demand from Iran, reports The Economic Times.

An aggressive buying by Iran has pushed basmati exports from the country to a record high in 2018-19, benefitting farmers of Punjab and Haryana, which account for over 70-75 per cent of the total volume-wise exports.

Normal rice cultivation has started with planting of nurseries in the Northern states and will be followed by sowing of Basmati rice in the coming weeks. The area under Basmati is expected to grow by 20-25 per cent in Punjab this season as farmers’ income rose 15-20 per cent in the last season. “Going by the sale of seeds, many farmers are likely to shift from normal paddy to Basmati this year as the income has been better in the last season,” a Haryana agriculture department official said to the Economic Times. 

According to Agricultural and Processed Foods Exports Development Authority (APEDA) data, the basmati exports in 2018-19 were 44.15 lakh tonnes as compared to 40.57 lakh tonnes in 2017-18.

“The growth in exports and higher realisation to farmers in the last fiscal could translate into more area under basmati in the 2019-20 season. We believe there will be an increase in area under cultivation in the basmati belts of Punjab, Haryana and Uttar Pradesh,” the All India Rice Exporters Association said.

“There will be little carryover stock due to better-than-usual international demand for Basmati. So, the market is expected to remain firm in the coming months,” the association said.

Export of the premium variety — India has an 85 per cent share in the Basmati exports market — has grown by 10 per cent in 2018-19, primarily due to higher demand from Iran. 

Iran buys a quarter of the total Basmati rice that India exports, but trade volumes have grown substantially in 2018-19. The Gulf nation bought 1.4 million tonnes of Basmati rice in 2018-19 compared to its usual demand of around 1 million tonnes. 

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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